Global stocks stabilize after tech sell-off, but investor focus remains on darkening economic backdrop
- Global stocks edged higher, as tech stocks steadied after Tuesday's losses, ahead of the release of the minutes from the Fed's last meeting.
Traderswill scour the minutes from the most recent policy meeting for a steer on the outlook for rates.
Global stocks steadied on Wednesday, ahead of the release of the minutes of the Federal Reserve's latest meeting that could shed some light on policymakers' views on
Futures on the S&P 500 and
Other household names including Amazon and Alphabet were also pulled down following Snap's dive.
"It highlights the ongoing sensitivity in the market surrounding tech stocks and the super-high valuations they have enjoyed as investors piled in after the initial shock of the pandemic," Susannah Streeter, senior investment and
Meanwhile, the dollar strengthened modestly, while US Treasury yields edged lower, with the 10-year note 1 basis point down at 2.752%, reflecting a degree of risk aversion among traders, against a backdrop of potential rate hikes and a growing chance of recession.
New Zealand's central bank was the latest to raise interest rates to tackle inflation. The RBNZ lifted its benchmark rate by 50 basis points on Wednesday to 2.0% and signaled the cash rate would edge higher than previously forecast.
"A larger and earlier increase in the OCR reduces the risk of inflation becoming persistent, while also providing more policy flexibility ahead in light of the highly uncertain global economic environment," the RBNZ said in a statement.
In Europe, European Central Bank President Christine Lagarde on Tuesday said the bank was not in a "panic mode" as she signaled eurozone interest rates will come out of sub-zero territory after eight years in the coming few months.
''The feel good factor from earlier in the week has fizzed away but there is still some element of relief washing through the financial markets that the crutch of cheap money isn't going to be withdrawn quite so quickly," Streeter said.
Slowing economic growth fueled by a combination of high-interest rates, red-hot inflation, a threat of recession, and strained supply chains exacerbated by Russia's war with Ukraine has kept investors wary. President Joe Biden confirmed the bleak economic environment for the US, stating he sees a rocky road to recovery ahead.
"This is going to be a haul. This is going to take some time," Biden said at a press conference.
The MSCI All-World index of global shares was flat on the day, having risen for the past two days, while in
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